Download KSE crossed all time high owing to 12 year low inflation figure

Weekly Mar ket Review
August 07, 2015
Spectrum Securities (pvt.) Limited
KSE crossed all time high owing to 12 year
low inflation figure
The week started with the announcement of inflation for the month of July. The
Consumer Price Index (CPI) continued to maintain its level at lower side as it
stood at 1.8pc YoY in July, which is the lowest level in last twelve years, primarily
due to a decline in oil prices and food inflation. The CPI increased 0.4%MoM in
July as compared to 0.6%MoM in June. A lower inflation figure pushed up buying
appetite among investors for leveraged stocks arising from expectation on further
discount rate cut in impending Monetary Policy and led the index to cross the
resistance level of 36,000pts (6th Aug'15) reaching new peak at 36,472pts.
WEEKLY FIPI SECTOR WISE
Se ctor
Total Weeky
(USD mn)
Fertil izer
10.05
O il and Gas Exp.
2.96
Commer ci al Banks
2.85
Food and Per. Care
0.90
Tech and Comm
0.83
O il and Gas Market
0.37
Texti le Composi te
(0.18)
Power Gen. and Dist
(1.38)
All other Sectors
(3.84)
C em en t
(7.65)
Total
4. 90
The global commodity market has witnessed a moderate recovery which was
well received by the market participants in the local bourse also. Oil stocks also
returned to green and contributed in upward trajectory of the index due to
expected inventory gains and anticipated positive earnings from refineries'
isomerization expansion plan. Also, OGDC gained on news regarding discovery
of oil at District Chakwal producing 180bbl/day. The Auto sector's stocks rallied
on anticipation of improved July car sales while investors were also remain
interested in selected banking, cement and fertilizer stocks ahead of corporate
result announcements and potential gain from expected discount rate cut.
Furthermore, World Bank appreciation regarding Government's effort to uplift
the economy boosted investors' sentiments. According to the Managing Director
of World Bank "confidence of the public and private sector in Pakistan has been
restored and the bank is looking forward to increasing cooperation with the
country". World Bank has also offered a $2bn assistance package for a four year
period. Finance Minister Ishaq Dar has also assured World Bank that Pakistan will
completely banish the menace of circular debt in the near future, this reassurance
was also extolled by investors. The talks with IMF have been completed in Dubai
on the eighth review under Extended Fund Facility (EFF) and It is expected that
Pakistan may receive a tranche of over $500mn in next week. Ishaq Dar has also
informed the representatives of IMF about the revived privatization efforts of
the government.
Source: NCCPL, Spectrum Research
Abdul Azeem
[email protected]
+ 92 (21) 32467598
www.spectrumonline.com.pk
Page 1 of 2
Weekly Mar ket Review
August 07, 2015
Spectrum Securities (pvt.) Limited
The market on Friday closed on 36,223pts which was (up 1.35%WoW) more than the
closing of last week which was 35,742pts. The local investors also took cue from recent
development and remained net buyer this week with a net inflow of $4.9mn as compared
to $3.03mn last week (up 62%WoW). The average daily traded volume for the week
ticked at 151mn shares in comparison with 162mn shares last week.
Outlook: Positive
The foreign reserves of the country hits all time high of $18.88bn in the week ending
31st July, the applauding of economic efforts by esteemed organizations like credit
rating agencies, IMF, World Bank among others all point towards positive journey for
the reviving economy and we remain optimistic about the macro-economic situation of
the country. The performance of the stock market is very sensitive to corporate result
announcements and upcoming MPS. We expect inflation for the year to pick up slightly,
led by increased energy tariff. Even though in near future the index will continue its
upward journey in our opinion it can also face some corrections. We believe international
oil prices among other commodity prices can exert pressure on the index. We advise
investors to accumulate only fundamentaly strong stocks. We are remain positive on
Cement, Banks, Refinery, Automobile & Textile Sector.
www.spectrumonline.com.pk
Page 2 of 2
Weekly Mar ket Review
August 07, 2015
Spectrum Securities (pvt.) Limited
About the Company:
The company Spectrum Securities (Private) Limited was acquired from M/S Mazhar
Hussain Securities (Private) Limited. Mazhar Hussain Securities (Private) Limited
was constituted in December 19, 2000. Later, Spectrum Securities took over Mazhar
Hussain Securities on October 27, 2014 and registered in the name of Spectrum
Securities(Private) Limited. The management of spectrum securities has stepped
into the industry with its agenda to attract the Corporate Clients therefore they
decided to come up with the new outlook, introducing a new management team of
professionals. Spectrum Securities (Private) Limited is TREC Holder of Karachi Stock
Exchange Limited and Lahore Stock Exchange Limited.
Disclaimer:
This report is for information purposes only and does not constitutes an offer, or
invitation to make an offer, to buy or sell any securities. All facts and figures have
been taken from the sources that are considered reliable. This report is prepared
for the use of Spectrum Securities clients and Spectrum Securities reserves the
right for its distribution. Opinions and recommendations provided does not take
into account specific investment objectives or particular investment needs of any
specific person or group of persons who may receive this report.
Analyst Certification:
I, Abdul Azeem, certify that all the views expressed in this report about the subject
matter are an accurate depiction of my personal views and no part of my
compensation or any other benefits, was/will be, directly or indirectly, related to
the specific recommendation expressed in this report. Furthermore, I do not hold
any beneficial holding in the scrip.